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The idea of a reduced VAT rate on general food products countermand is being discussed in the government. At that, the officials are willing to change this reduced rate for targeted aid to the indigent.

Ministry of Finance and Ministry of Economic Development are discussing the idea of changing a reduced VAT rate, that appraise general food products, for targeted aid to the indigent citizens. Four officials told to Vedomosti about that.

Considering that, general food products, textbooks, medication and goods for children are charged with a reduced 10% VAT rate, the budget loses about 150 billion rubles a year, told to the newspaper one of the interlocutors.

At the meetings with the first Prime Minister Igor Shuvalov the Ministry of Finance suggested to raise a reduced VAT rate in 2017 up to 12%, and from 2019 increase it on 2 more percent, until it corresponds to the ordinary VAT rate at 18%. With that, it was suggested to provide indigent citizens with the targeted aid in 1500 rubles.

One of the sources of the newspaper told, that reduced VAT can be repealed not for all goods; for some food products and school uniform it may remain. In order to implement targeted subsidies, it’s necessary to create a data base of households, conduct a pilot project in some regions and only then repeal the reduced rate, said one of the officials. At the moment, the mechanism is being developed in the financial unit of the government, told the Newspaper one of the interlocutors; he also highlighted, that neither social, nor inflation effect the Ministry of Finance hasn’t considered yet.

A representative of the Ministry of Finance said to the Newspaper, that 10% reduced VAT rate countermand isn’t being discussed in details at the moment.

In June 2016 the source of Interfax agency told about developing the idea of raising VAT rate from present 18% to 25%. Deputy Head of the Ministry of Finance Ayrat Farrakhov said, that the Ministry of Finance didn’t suggest VAT rate rising along with simultaneous reduction of social dues and such idea isn’t being considered in the government. «Besides, according to the President’s decision these issues are not for consideration until 2018», — highlighted the Deputy Minister. He added that this issue may be discussed only at the expert level. «That’s why at the expert level may be discussed absolutely various issues. But nevertheless, at the official one — not,« — said Farrakhov.

The head of Counting Chamber Tatiana Golikova, called possible VAT boost up to 25% «a media hoax». According to her «it’s absolutely impossible».

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